#1 Despite reforms, Congress hides $3.5B in defense earmarks
10-13-2008, 01:30 AM
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- Aug 2005
No matter who wins, the next president promises to take back Washington from powerful interests and lobbyists.It is the same stirring promise Congress made last year when — rocked by scandal and under new leadership — lawmakers passed what they trumpeted as some of the most significant ethics reforms in years.
Key among those reforms: rules requiring lawmakers, for the first time, to disclose their earmarks — federal dollars they were quietly doling out as favors.
But time after time, Congress exploited loopholes or violated those rules, a Seattle Times investigation has found. An in-depth examination of the 2008 defense bill found $8.5 billion in earmarks. Of those, 40 percent — $3.5 billion — were hidden.
And Congress broke its pledge — and President Bush's challenge — to cut earmarks in half. Lawmakers cut the dollar amount of defense earmarks by about a fourth and the number by 19 percent.
The hidden earmarks range from $8 million for lighting sold by a financially troubled company in North Carolina to $588 million for a submarine the administration doesn't want.
After months of investigating the $459 billion 2008 defense bill, The Times found:
• The hidden $3.5 billion included 155 earmarks, among them the most costly in the bill. Congress disclosed 2,043 earmarks worth $5 billion.
• The House broke the new rules at least 110 times by failing to disclose who was getting earmarks, making it difficult for the public to judge whether the money is being spent wisely.
• In at least 175 cases, senators did not list themselves in Senate records as earmark sponsors, appearing more fiscally responsible. But they told a different story to constituents back home in news releases, claiming credit for the earmarks and any new jobs.
Lawmakers do not face penalties for failing to follow these ethics rules.
"The whole ethics bill was a sham," said Sen. Jim DeMint, a Republican from South Carolina, after being told of The Times' findings.
"It was written to create loopholes, to get around any transparency and our ability to cut out those earmarks. Neither leadership is committed to significantly changing the earmarking process."
Complicating matters, lawmakers routinely accept campaign donations from the people asking for earmarks, raising the specter of corruption.
The Times found that people at companies that benefited from defense earmarks this year gave more than $60 million in campaign donations to incumbents in Congress over the past six years. In addition, companies getting earmarks in the 2008 defense bill spent $141 million lobbying Congress last year alone.
"The people who want the earmarks are the same people who we count on to raise us money for the campaigns," DeMint said. "It's just a little too cozy."
Last year, Congress promised to shed light on the secretive process. But the lists of earmarks are still buried in obscure documents that are difficult to find and search. Until Congress put them online a couple of weeks ago, the House disclosure letters, linking lawmakers to companies, were thick volumes of paper kept in a cabinet in the offices of the House Appropriations Committee.
When a reporter for the Congressional Quarterly pointed out how difficult it remains to pull all the information together, Rep. John Murtha, D-Pa., chairman of the committee that drafts the defense bill, had a quick answer: "Tough shit."
The Times spent months compiling this information — including campaign donations and companies' lobbying efforts — and put it in a searchable database. It can be found on our Web site at seattletimes.com/favorfactory.
Big bucks for little-known product
One case in which Congress clearly broke its disclosure rule involves an $8 million earmark to buy a "portable illumination system." It turned out to be for Cyberlux, a tiny lighting company in Durham, N.C., that is struggling to survive.
Cyberlux competes against corporate giants such as General Electric but advertises that its lights save energy and cost less than common household bulbs. Despite its efforts, the company barely sells any products to consumers.
Cyberlux lost $9 million on sales of only $332,000 for the first six months of this year. Since its founding in 2000, Cyberlux has lost more than $50 million and the company has sunk deeply in the red. Its stock sells publicly for about a penny. Earlier this year, its independent auditor said in the company's financial statement that Cyberlux was in danger of failing.
To stave off failure, Cyberlux has turned its attention to the military and to earmarks.
In a December letter to shareholders, Cyberlux said: "After product demonstrations to aides in the Capitol building, they enthusiastically recommended budgetary provisions for the BrightEye to their respective Representatives and Senators who responded with a line item inclusion of $8 million."
Thanks to the undisclosed earmark, the company announced in February that the Air Force had made a commitment to order $3.3 million of portable lighting products from Cyberlux, including one product on collapsible legs that looked much like its name, "Watchdog."snip
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